Don't expect leniency from ASIC, IPA warns

The IPA has warned that accountants who hope ASIC will take a light approach to enforcement of the new SMSF licensing regime after 30 June this year are placing themselves in the regulator’s firing line.

While ASIC may traditionally be “a little lighter” in terms of enforcement at the beginning of a new regime, accountants should not be relying on any form of grace period once the accountants’ exemption expires on 30 June, the Institute of Public Accountants' executive general manager of advocacy and technical, Vicki Stylianou, told AccountantsDaily's sister publication, SMSF Adviser.

Ms Stylianou noted there has been an extensive transitional period for accountants to get their licensing arrangements sorted, with the Future of Financial Advice reforms effectively in the works for six years.

“If you get any kind of leniency then you’re lucky, but definitely do not rely on it and be as prepared as you must be come 1 July,” she said. “It is really going to be crunch time come 1 July."

Ms Stylianou echoed ASIC’s sentiments, and believes there will be a substantial proportion of the accounting community that will exit SMSF advice.

“There’s a lot who have decided they don’t do enough of them, so it’s not worth beefing up or staying in, so they’re just going to exit,” she said.

Late last week, ASIC reported an increase in the number of applications received for a limited licence, but commissioner Greg Tanzer believes many accountants have “changed their business model” for the provision of SMSF advice after 30 June.

“We think that probably a lot of people have decided either not to get a limited licence and actually to operate under someone else’s licence, or that they have changed their business model so that they won’t be advising on establishing or operating an SMSF, but instead they’ll be referring that business to somebody who is,” Mr Tanzer said.